How to Start a Bed and Breakfast

If you're thinking of turning your home into an inn, start here to learn about pricing, costs, employees and more.
How to Start a Bed and Breakfast
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A romantic room for two in a historic home, aglow with the patina of lovingly restored antiques, the luster of fine china, and the sparkle of silver. A fire crackles in the hearth and the rich scents of fresh coffee and homemade cinnamon rolls waft up from the kitchen. It's the picture most people conjure when they consider a stay at a bed and breakfast. And it's an accurate portrait.

But not the only one. Bed and breakfasts are lodging with a twist. They're typically found in historic homes, from Revolution-era townhouses to Queen Anne mansions to Craftsman bungalows. But B&Bs also occupy such nontraditional buildings as colonial taverns, Gay '90s schoolhouses, Roaring '20s banks, Victorian lighthouses and a panoply of other structures steeped in history and romance. And you'll also discover wonderful B&Bs in modern Manhattan high-rises, on working dairy farms and cattle ranches, and in many a new home perched beside a river, lake or the sea.

Best of Both Worlds
What exactly is a bed and breakfast? It's a sort of hybrid between a luxury hotel and a private home, embodying the best of both worlds. A B&B is generally a small establishment with four to 10 guest rooms instead of the 50 to 100 or more found at most hotels. The owners live on-site and interact with travelers as if they were invited guests rather than anonymous temporary room numbers. And guests are treated to lost of little deluxe touches like chocolates on their pillows, turn-down service, and baskets of bath and beauty products set out on Jacuzzi tubs.

And, of course, there's the "breakfast" in bed and breakfast, a sumptuous home-cooked repast that comes with the price of the room and is served each morning in a communal dining room or in the guest's own quarters. B&Bs also tend to feature frosty glasses of iced tea or lemonade on the porch on hot summer afternoons; cups of cocoa after sleigh rides on wintry afternoons; plates of cookies in the kitchen; and wine and cheese in the parlor on dusky evenings--all a part of the room rate.

No wonder bed and breakfasts are so popular.and becoming more so all the time. According to the Santa Barbara, California-based Professional Association of Innkeepers International (PAII), in 1980 there were a relative handful of B&Bs/country inns--1,000 properties that hosted 1 million guests. At the latest count, at the turn of the millennium, that figure had swelled to 28,000 properties hosting 50.5 million guests.

Average occupancy, or number of rooms filled on a daily basis, according to PAII, has skyrocketed along with the number of available properties, increasing from 45 to 50 percent in a recent four-year period. And room prices have also increased, going from $103 to $121 in the same four-year stretch.

The Profit Factor
Whether you want to start a B&B to escape the rat race, to supplement your income, to create a business out of a historic home that you love, or to indulge your love of being a host or hostess, you'll want to know the profit factor. What revenues can you expect as a bed and breakfast host?

The answer varies a great deal, depending on the number of guest rooms in your B&B, the seasonal (or not) nature of your locale, the length of time you're in operation, how creatively you promote your business, and how hard you want to work.

Keep in mind, however, that the bed and breakfast is not a high-income industry. "This is not a business you go into to make a lot of money," cautions Nancy Sandstrom, a former lecturer on B&B startups and now in her sixth year as an innkeeper. "You can make a profit, and many of your personal expenses are semi-covered. But it's a lifestyle decision. You'll make your real profit when you sell."

The more guest rooms you have, the more gross income you'll earn. Which makes sense--two rooms at $100 each is $200 per day, while 10 rooms at the same rate at full occupancy brings in $1,000 per day. Which is great. But it also follows that the more rooms you have, the more expenses and the more work you have as well.

Also, note that we've used the term "at full occupancy." No innkeeper expects year-round total occupancy unless a series of major conventions, the Olympic Games and a royal coronation are all occurring in town on each other's figurative heels.

However, it doesn't all have to be doom and gloom. Not all bed and breakfasts are seasonal ones. And even if yours is, there are things you can do to generate off-season traffic, like inventing reasons for guests to visit other than beachcombing or skiing. The seaside B&B might host a Victorian Christmas weekend to bring those summer people in during winter, for example, while the ski resort B&B might feature a "Murder Among the Pines" mystery weekend to attract tourists during summer.

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